We’ve touched on having an emergency fund, keeping cash savings, creating and maintaining a budget, and now a little less fun (or potentially a lot more fun!) topic…FRUGALITY.

What is it? My definition is short and sweet: saving money where you can save it.

There are some out there who say you do not need to be frugal with daily expenses like lattes and fast food. That you only need to watch major expenses like vehicles, houses, furniture, etc. But what if you did both? What if you saved money wherever you could save it–on the big and the small?

Right now, on my income and with my budget, it’s important for me to not buy a latte or a Starbucks drink everyday. It’s important I don’t buy every book I want to read. It’s not that I couldn’t–it’s that I’m choosing to save that money instead.

And in the future when my income is higher, I’m still choosing to take that view on daily frugal living. Why? Because nothing has really changed. My income has gone up and I have the money for it (just like I did before.) But now I get to save even more.

Call me a tightwad.
But I’m not.

Being frugal doesn’t mean you never go out. It doesn’t mean you don’t give your money to charity. It doesn’t mean you hate having fun. In fact, it means you love to have fun so much you’re going to not spend now and save instead so you can have a TON of fun later.

But being frugal does mean you might cut coupons. Or take advantage of Starbucks free pastry day today before 10:30am. Or take your lunch to work. Or wear clothes more than once. 😉

Or–a huge one for me–NOT spend your money on the dumb vending machines at work. They SUCK your money. All so you can just get up from your desk to “do” something for a minute. Go ahead, throw your $2.25 on an energy drink! But I’ll keep mine and hope you do yourself a favor one day and add up how much you spent this month on that machine.

There’s no cut and dry, “This is what frugal is. This is what frugal is not.” But regardless, frugality DOES exist and regardless of your rate of income you should be practicing it. Because no one needs to spend $150 when they could spend $140 for the exact same thing just with a little more effort.

Overall, I see frugality as a lifestyle. And as such it is one that you give yourself permission to break out of instead of vice versa (where you live an extravagant lifestyle and ‘make yourself’ live frugally when you have to.)

What is frugality to you? Do you think it’s portrayed in a bad light? How do you practice it?

Either I’m going to go out and spend all my money on food, new clothes, and awesome entertainment, or I’m going to sit inside and sulk that I can’t have any “fun” right now because I’m saving it.

Neither option the way to go, of course! But sometimes that mentality wants to sneak in on me. But I won’t let it. Balance is key!

Regardless of what others may say, the key to financial balance is having and maintaining a budget. Some feel it is too constraining but in reality it is very freeing because you get to control where your money is going instead of letting it control you.

A budget is easy to make and there are hundreds (if not thousands) of different templates you could use. J. Money at Budgets are Sexy has some pretty rockin’ ones you can find here. I’ve decided to create my own that probably only makes sense to me but here is the breakdown…

My Budget

I get a paycheck every 2 weeks so that is [usually] 2 a month. I call one paycheck, “Paycheck 1” and the other, “Paycheck 2.” (Simple, huh?!)

Paycheck 1 I designate out this way:

Cash Savings

Vacation Savings

School Savings

Rent

Gas

Food

Anytime Fitness

Life

A certain amount of money goes toward each of those categories and when they are all added up it equals the total amount of paycheck 1.

I do the same thing with paycheck 2 except it’s categories are a little different:

Cash Savings

Vacation Savings

School Savings

Electricity

Water

Cable

Renter’s Insurance

Phone

Insurance

Gas

Food

Life

Best Buy

And once again, a certain amount is designated to each and there is none left after that. =) I plan ahead of time where my entire paycheck is going so there are no questions.

Once I have built up my “cash savings” I will have some leeway but right now I want to get my emergency fund up.

The Usefulness of a Budget

Having and keeping a budget up will save you tons of stress and worry and will also pay off for you in the long run.

The key is to pay yourself first (in the form of savings) than your bills than day-to-day living.

Once again, it’s basic. But I know some of you aren’t doing it. 😉 You can start today. I’m not an expert on budgets but I play with mine every day and have looked at a lot of other templates. If you have a question about one please feel free to contact me.

Do you keep a budget? Why or why not? How has it helped you achieve some of your goals?

I’m not into the “get rich quick” schemes but what I am into is being responsible with my finances, and hopefully helping a few people along the way. I’m not the smartest person with finances but I read (a lot) of personal finance blogs and have learned a lot from ordinary people who have made mistakes and learned from them as well as who have made decisions that were straight dead on.

So there are a few things I’ve decided when it comes to my money.
One: It isn’t really mine so I hold it with open hands. It’s entrusted to me to use for the good of others and myself and to honor God and people around me. And…
Two: I would like to be a millionaire one day.

Pretty simple, really. Nothing to get stressed about. But it is a little something for me to get excited about and work towards. Slowly, but surely.

So here it is:

My Millionaire To Do List

1. Open a 401(k) plan and fund it up to the max my employer will match.
For me, this is 5% of what I make. So on a yearly basis I’ll add 5% of my income and my employer will match it so whatever 10% of my income is that year is how much will be added to my 401(k) for the year. Cool!

2. Open a Roth IRA and max it out yearly.
A roth IRA can be funded up to $5,000 a year. And what is great about Roth IRAs is that you get taxed on it as you put it in, not when you pull it out. Perfect.

3. Keep a budget and be frugal but not to too frugal.
What I love about a budget is that I get to tell myself how much I get to give myself in my savings accounts as well as how much I get to just spend on whatever I want. (Of course, the bills are in there too but not quite as exciting.) And it helps me stay frugal. Knowing that I want to be able to have an extraordinary amount of money in my savings accounts gives me the inspiration I need to live my day-to-day life a little less luxuriously.

4. Regularly find ways to increase my income.
This could be trying to get a raise or promotion at work, or starting a side business or selling random things I don’t need anymore. The more channels of income I have the more income I’ll have. And income is the best way to save more money. Cause I can live off of what I have right now. So if I make more, I can keep living off of what I have right now and save all the extra.

So the question is…why create a millionaire to do list? Why save instead of spend? Well, I don’t save for the sake of saving. I save so I can live well when I’m older. I save so I can go on vacation later. I save so I can buy the new laptop with cash. I save so I can give to other whenever I want to.